Residential property

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Casual landlords need correct knowledge

23 May 2008

Homeowners who rent their property privately must ensure they have the correct knowledge, mortgage lender Paragon said yesterday.

The company revealed that a growing number of people are choosing to rent their homes privately instead of selling, with tenant demand rising as buyers struggle to get mortgages.

John Heron, managing director of Paragon, said casual landlords must do their finances correctly and make sure they know the laws and legislations.

"A number of new reforms have been introduced in recent years, such as tenancy deposit protection and licensing for homes in multiple occupation, and not complying with these could leave landlords seriously out of pocket," he said.

"Homeowners going down this route have to ensure they have the correct knowledge."

Things that casual landlords must be aware of include tax rules, insurance policies and energy performance.

New instructions to let property increased "significantly" in the first quarter of 2008, according to the Royal Institute of Chartered Surveyors.

Its residential lettings survey showed that private landlords make up 85.2 per cent of the letting market.

Pat Davies, partner in the residential property practice, comments: "Landlords really do need to do their homework as the consequences of failing to comply with certain regulations can be penal, eg most landlords collect a deposit, but if a deposit is not in a valid scheme under the Tenancy Deposit Scheme, a landlord can be ordered to repay three times the amount.

"In addition to certificates providing annual checks for the safety of gas and electricity appliances, a new one will be required as of October 2008, when it will be necessary to have an energy performance certificate."